How to create a target customer list for your market research
Posted: Fri 13th Oct 2023
When running a small business, knowing who your ideal customers are can make all the difference. With an overwhelming amount of information available, it's easy to feel lost when trying to identify the people who will truly benefit from your product or service.
Many businesses jump straight into campaigns without a clear picture of their target audience. All that tends to happen then is that they waste both time and budget.
Creating a target customer list isn't just good practice – it's a fundamental strategy that can elevate your market research to new heights.
In this blog, we explain the process of identifying and cultivating your target customer list – setting the stage for successful marketing campaigns that resonate with the right people.
What is a target customer list?
A target customer list is a list of the ideal customers for your business. These are the people who are most likely to buy your products or services.
Why is a target customer list important?
A target customer list is important for several reasons:
It helps you focus your research efforts. Not all customers are the same, and if you try to please everyone, you risk pleasing no-one. Customer targeting gives you confidence that a group of users or buyers will have similar preferences and respond well to your product or service.
It lets you create more effective marketing campaigns. A well-defined target client list helps you craft messages that speak directly to your audience, increasing engagement and conversions.
It allows you to develop products and services that meet your customers' needs. Once you know exactly who to target, you can develop products and services that they are more likely to want to buy.
How to create your target customer list
So, how do you go about creating a target customer list? Follow these steps and you'll be well on your way.
Step 1: Identify your most profitable customers
The first step in building a target customer list is understanding which customers bring the most value to your business. The Pareto principle, or 80/20 rule, suggests that 80% of your revenue often comes from just 20% of your customers.
Here's how to identify these key customers:
Analyse your sales data to find customers with the highest lifetime value.
Look for patterns in repeat purchases or high-ticket transactions.
Assess customer loyalty through engagement metrics, like frequent visits or referrals.
This analysis will give you a clear idea of the types of customers who generate the most profit, helping you focus on finding similar prospects.
Step 2: Segment your audience and build personas
Once you've identified your profitable customers, it's time to segment your audience into groups with similar traits. This process, known as customer segmentation, involves dividing your customer base based on shared characteristics, such as the following:
Demographics: Age, gender, income, education level.
Geographics: Location, climate, urban or rural settings.
Psychographics: Lifestyle, values, interests, attitudes.
Behavioural factors: Buying history, product usage, brand loyalty.
Using these segments, create customer personas – detailed profiles that represent your ideal customers. For example:
Persona A: Sarah, a 35-year-old professional living in London who values sustainability and shops online for eco-friendly products.
Persona B: Mark, a 50-year-old business owner in Dublin seeking cost-effective tools to streamline operations.
Personas help you understand your customers' motivations, making it easier to tailor your marketing and outreach strategies. Read more in our blog, Why creating buyer personas is so important to a new business.
Step 3: Define and prioritise customer groups
With your personas in place, the next step is to group similar ones together to form your target client list. Focus on groups that align closely with your product or service. For instance:
young professionals aged 25 to 40, with disposable income and an interest in fitness, or
small business owners in the UK seeking digital marketing solutions
Once you've defined these groups, prioritise them based on potential value and how well they match with your business goals. For example, if you sell software for small businesses, your focus might be on start-ups and small firms looking for solutions that don't eat into their budget too much.
Step 4: Build a list of potential customers
After defining your customer groups, it's time to compile an actionable target customer list. Here's how to get started:
Research online: Use tools like LinkedIn, Google and industry directories to identify individuals or businesses that fit your personas.
Make use of existing data: If you already have customers, review their feedback and purchase history to identify patterns and commonalities.
Conduct surveys and interviews: Reach out to current customers to learn about their experiences, preferences and pain points.
Explore social media: Platforms like Facebook and Instagram allow you to target specific demographics with ads, making it easier to find potential customers.
As you gather prospects, organise them into your target client list using a spreadsheet or CRM system.
Step 5: Refine your targeting with a CRM system
A customer relationship management (CRM) system is an invaluable tool for organising and refining your target customer list. Here's how it can help:
Automated segmentation: CRMs allow you to categorise customers by demographic, behaviour and preferences, saving time and improving accuracy.
Better personalisation: By tracking interactions, you can craft tailored messages for each customer group.
Performance metrics: Use CRM analytics to monitor the success of your outreach and adjust strategies as needed.
Popular CRM options for small businesses in the UK include Salesforce, HubSpot and Zoho CRM.
How to target potential customers effectively
With your target customer list in hand, the final step is reaching out to these prospects effectively. Here are some tips:
Personalised messaging: Craft email campaigns, ads and social media posts tailored to the specific needs and interests of your customer groups.
Content marketing: Create blogs, videos or guides that address the challenges your target audience is facing.
Social media engagement: Use targeted ads and community engagement to connect with your audience on platforms where they spend time.
Events and networking: Attend trade shows, workshops or local business events to meet potential customers face to face.
By implementing these strategies, you'll not only attract the right customers but also build lasting relationships that drive growth.
Get started with customer targeting today
Creating a target customer list is an essential step in your market research. By following the steps above – from identifying profitable customers to refining your approach with CRM tools – you'll be well on your way to reaching your ideal audience.
Remember, targeting customers isn't about excluding anyone, but about prioritising the groups most likely to benefit from what you offer.
With a clear understanding of how to target potential customers, you can develop effective strategies that boost customer satisfaction, improve efficiency and drive long-term success.
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